Understanding sequence of returns risk

The order or sequence in which the investments in your portfolio have gains or losses will impact the size of the portfolio over time. Investors with portfolios of similar size with the same average annual returns could face completely different financial scenarios depending on the year they retire.

Retire when the market is up and it can bolster your portfolio for the years ahead. But if you retire in a year when the market is down, a fixed withdrawal plan may eventually come up short.

Guaranteed lifetime income may help reduce sequence of returns risk. It can help cover essential expenses throughout your lifetime, regardless of what happens in the market when you retire.